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There's a battle brewing right this minute on those "Bush tax cuts" which are scheduled to expire January 1.
President Obama wants to move forward with his campaign promise to keep the tax cuts for everyone making less than $200K per year, and allow income tax rates to rise to there pre-Bush levels on those Americans making more than $200K per year(single filers).
Obama thinks that the tax rates issue is a good political issue for Democrats to push just before the midterm election. The theory, I think, is to place Congressional Republicans in the position where they would have to vote against a bill which continues Bush-era income tax rates for 97% of Americans....and do so just before an important midterm election.
By voting for a Democratic bill which only protects the income tax rates on 97% of Americans, Republicans would also be voting to increase taxes on the top 3%.....a violation of the holiest of Republican doctrines..."Thou shalt not tax the wealthy, ever."
In theory, that all may be true....but we live in the real, not the theoretical.
Republican John Boehner of Ohio showed a bit of political weakness this past Sunday when he told CBS that if he only had the choice to vote to extend tax rates on those making less than $200K....he would vote in favor.
The New Minister of Voodoo Economics, Paul Ryan (R-WI) says no way. It's either all the tax rates are extended...or nothing.
Enter this guy....
Gotta' love Mitch McConnell's facial expression.
Mitch, by god, announced his own legislation which he says...
"ensures that no one in this country will pay higher income taxes next year than they are right now."
What's a dysfunctional Congress to do?
With statements like this from Senator Joementum Liberman (Asshole-CT)....
"everything I can to make sure Congress extends the so-called Bush tax cuts for another year and takes action to prevent the estate tax from rising back to where it was."
..and this from alleged Democrat, Senator Ben Nelson (D-NE).....
"It would be very hard for me to support that,"
...which TPM suggests means...
...he might side with Republicans on the Bush tax cuts, suggesting he might filibuster a tax bill that allowed tax cuts for the rich to expire.
...It sure looks like a high stakes game of chicken is in progress.
Josh Marshall at TPM thinks the next 24-48 hours is all important.
If Boehner and some Republicans vote for the sub-250k bill in the House, great. It allows the president to play them off Republicans in the Senate. If no Republicans vote for it in the House, great. It gives the Democrats a clearer position to run on.
If the Republicans try to filibuster in the Senate, that's really not a problem for the Dems since filibusters are nothing to be afraid of when you're pushing something that has public support. Indeed, quite the contrary, especially when you're doing it in the face of an impending election.
Maybe. But the question will be....as it was during the health care tussle....will Democratic Senators join obstructionistic Republicans to filibuster their own party's bill? Or, will at least one Republican Senator join the Democrats to break the filibuster, moving the income tax rates bill to a vote.
No doubt that Josh Marshall has it right when he says this is a big deal. Both politically and policy-wise.
Extending all the tax cuts will cost the Treasury $4.4 trillion over the next ten years. All of it would have to be borrowed. Just extending the tax cuts for the richest 3% would cost $700 billion over the next ten years, again, all borrowed.
Not extending all the tax cuts would take that $4.4 trillion out of the economy over the next 10 years. Not extending the $700 billion cuts for the rich would have a much lesser effect on consumption moving forward.
It's a rock-and-a-hard place scenario with weak kneed Senate Democrats in the driver's seat.
Democrats will cave....I know, shocker.....siding with Republicans to extend ALL tax cuts for the next 2 years. If that happens, and President Obama does not veto such an extension......and all of this happens before the midterms.....Democrats are doomed.
Could be wrong.